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I see intermarket analysis (the idea that other markets can be predictors of the stock market) mostly as a big waste of time. Often, what correlates today won’t correlate a year from now, or the correlation may even reverse. The best way to analyze and forecast stock price trends is to analyze stock prices themselves. That’s the basis of technical analysis (TA). I spend about half my time on TA in my analytical work for The Wall Street Examiner Pro Trader Market Updates (http://wallstreetexaminer.com/category/professional-edition-3/todays-markets-professional-edition/).

But there is an exception to the rule that intermarket analysis is useless….and it’s the U.S. Treasury market.

If you know what to look for, Treasuries-in particular, the 4-week T-Bill-can tell you something very important about liquidity and which direction the money is flowing. That, in turn, will ultimately tell you where the stock market is headed.

The Trump/Republican tax proposal sketch is out. 360061522-Republican-Tax-Plan While the hope is that lowering marginal tax rates will stimulate the economy (creating more jobs and tax revenue for Uncle Sam),

This is the new model of nationalization: central banks control the valuation of private-sector assets without actually having to own them lock, stock and barrel.As you no doubt know, central banks don’t actually print money and toss it out of hel…

Listening to CNBC and Bloomberg TV, you might have gotten the impression that Hurricanes Harvery and Irma created such extensive damage (they did) that there would be labor shortages and a big rise in real wages.

After years of delay on its application to join the European Union (EU) as a full member, Turkey has made overtures to the SCO as an alternative to the EU.

Turkish Prime Minister Recep Tayyip Erdogan said after a meeting with Russian Prime Minister Vladimir Putin that Turkey was seriously considering becoming a member of the SCO instead of continuing its efforts to join the EU.

“The European Union needs to stop stalling us,” Erdogan said. “We have a strong economy. I told [Putin], ‘You should include us in the Shanghai Five [the former name of the SCO] and we will say farewell to the European Union.’ The Shanghai Five is much better off economic-wise. It is much more powerful. We told them, “If you say come, we will.'”

Liquidity moves markets!

What’s the Shanghai Cooperation Organization?

The SCO’s full members are China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Mongolia, India, Iran and Pakistan have observer status in the SCO while Turkey is a dialogue partner along with Sri Lanka and Belarus.

Originally formed in 1996 to demilitarize the border between China and the former Soviet Union, the SCO was expanded in 2001 to include Uzbekistan.

According to a background study by the Council on Foreign Relations, the SCO has the potential to be an important body for regional energy and security cooperation in Central Asia, but has so far not achieved anything substantial.

Both China and Russia have secured bilateral agreements with other SCO members to build pipelines from the energy-rich Caspian Sea region to their respective home markets but this has taken place outside of the SCO.

“The competing efforts of Russia and China to secure influence in the region are a potential obstacle to extensive SCO energy cooperation,” the Council on Foreign Relations concluded.

If genuine energy cooperation could be achieved by the SCO, particularly if it included Iran, that would be a boon for Turkey, which depends on imported energy to fuel its rapidly growing economy.

Would SCO Bid Affect Turkey’s NATO Status?

Turkey is a member of NATO, while the SCO is seen as acting as a counterweight to American interests in Central Asia – if not outright anti-American.

The SCO has called for U.S. troops to leave the region but the U.S. has military bases in several Central Asian countries, including SCO members Kyrgyzstan and Uzbekistan, to support the war in Afghanistan.

Although those bases are subject to bilateral agreements with the countries involved and not with the SCO, the issue of what happens to those bases when the U.S. withdraws from Afghanistan at the end of 2014 will be a thorny one.

Of course, the U.S. has a major military presence in Turkey. If Turkey joins the SCO, what will happen to the U.S. bases there? Will Turkey want to withdraw from NATO?

As the U.S. State Department said, if Turkey joins the SCO, it will be “interesting.”

SCO a Cover for Big Power Diplomacy?

Many experts feel that the SCO can never be an effective security or energy cooperative organization because of its membership.

Russia has a proprietary interest in the Central Asian countries Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, which used to be part of the Soviet Union, and clearly wants to keep rival China out.

For its part, China wants to get access to the energy-rich area around the Caspian Sea which, according to the BP Energy Survey, holds about 21% of the world’s oil and 45% of the world’s natural gas.

Would Russia or China really welcome Turkey, a significant power with regional ambitions of its own, into the SCO?

Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I am a contractor for Money Map Press, publisher of Money Morning, Sure Money, and other information products. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases I receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

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